Does Income Protection Have An Initial Exclusion Period?

Exclusion Periods For Different Types Of Insurance

There are a variety of policies to choose from and they will all sound fairly similar until you get into the fine print.

With the Income Protection options Drewberry recommends, there’s no exclusion period at the start of the policy. You can claim from the moment the policy starts for conditions that occur after the start date.

With Unemployment Insurance, there is usually an initial exclusion period of often between 90 to 120 days, depending on the insurer. This safeguards the insurer against people taking out a policy when they’re already aware they will be made redundant in the near future.

What Income Protection policies do have is what’s known as the ‘deferred period‘, which you set at the start of the policy. This relates to how long you can wait after suffering an illness or injury before you can make a claim.

Think of it like a Car Insurance excess. The higher your excess, the lower the premiums. So, with Income Protection, the longer you can wait before receiving a payout, the lower your premiums will be.

It’s typical to align this period with any sick pay you might receive or savings you have to tide you over.

Ultimately, the best option is to seek advice in this area, as there are so many ins and outs when it comes to these policies. It can get confusing if you’re trying to tackle them alone.